In Part II we explain why Japan has unequivocally entered the terminal phase of its 20-year reflationary experiment.

Further “abundance” harvesting from this point forward will be difficult if not impossible.

Is the devaluation of the yen really the successful technology that will fool nature? We think not. The outcome will have spectacular implications for many global assets, ranging from real estate, to stock markets, to oil and gold.

Observers of Japan from this point forward should be sober about the threshold the country has now crossed. Japan has effectively said to the world: Go ahead, make my day. Sell our currency, give us inflation, and get out of our bonds.

Japan has indeed taken to heart the Krugman dictum, and committed to irresponsibility.